Happy Thursday! In today’s newsletter, we explore the impact of the Biden-Harris economy on American households, the rapid decline of global birth rates, and the danger of overdependence on China.

Edited by Sutton Houser and James Desio

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Topline: AEI’s Marc Thiessen argues that Vice President Kamala Harris’s economic agenda will lead to the same hardships that households are facing under the Biden-Harris administration. He points out that inflation (caused by high government spending) has forced Americans to deplete their savings and accumulate unprecedented debt.

Rising Household Debt: In 2021, US households had record-high savings, but after the $1.9 trillion American Rescue Plan—which Harris helped pass with her tiebreaking vote—soaring inflation drove them to spend down those savings. Now, household debt has reached a record $17.8 trillion.

How Much Spending? Thiessen warns that if Harris’s proposals are enacted, they will add nearly $2 trillion in new government spending, further fueling inflation.

Topline: AEI’s Jesús Fernández-Villaverde explains that, for the first time in history, global birth rates have dropped below the replacement rate. Countries such as India, China, the US, Bangladesh, and Mexico, as well as all of Europe, are all below the replacement rate.

What Does This Mean? Fernández-Villaverde predicts that if this trend continues, younger generations will likely see a sustained decrease in the global population for the first time in 60,000 years.

The Solution: He emphasizes that reversing this demographic decline will require strengthening economic and societal support for large families.

Topline: China’s slowing economic growth is dragging down overly dependent nations, warns AEI’s Michael Beckley. Beginning in 2008, China’s booming economy lent over $1 trillion abroad. With its growth slowing, China is reducing foreign lending and pressuring many developing nations to repay loans–causing severe debt distress.

Nations at Risk: Beckley suggests that Venezuela’s 2014 economic collapse should have warned other nations that are dependent on China, but they ignored this warning. Sri Lanka and Zambia have defaulted on billions of dollars in debt in recent years and are now servicing massive debt. Similarly, Laos and Pakistan face severe economic challenges as they try to repay billions of dollars borrowed from China.